CFD Trading Vs Shares Dealing

See how CFD trading measures up to traditional shares dealing and find out which form of trading is most suitable for you using our handy table below.

Feature

CFD trading

Shares dealing

Ability to go long - take advantage of rising prices

Yes

Yes

Ability to go short - take advantage of falling prices

Yes

Ability to hedge - go short and mitigate against potential losses in your shares portfolio

Yes

Free from Stamp Duty*

Yes

Pay Capital Gains Tax* - CGT to be paid on profits

Yes

Yes

Leveraged trading - gain a large exposure for a fraction of the value

Yes

Immediate dealing - instant trading both in and out of a market

Yes

Yes

Access to other asset classes - such as Indices, FX etc

Yes

Access to global shares - trade over 10,000 different shares from around the world

Yes

Yes

Receive dividend and interest adjustments

Yes1

Yes

Physical ownership - benefits include the ability to attend AGMs

Yes

¹Positions are adjusted to reflect dividends.

No Stamp Duty

Unlike shares dealing, a CFD is a derivative product that enables you to speculate on the price moves of shares and other global markets without having to actually own the physical asset. This means that there is no Stamp Duty to pay.

Leveraged access

With traditional shares dealing, you’d have to pay your broker the full value of the shares you want to purchase. For example, if you‘d like to purchase £10,000 Facebook shares, you’d have to deposit the full £10,000.

Importantly, CFDs are leveraged which means you only have to put down a small fraction of the total value of a trade (usually a deposit of between 3.33% and 50%) to get the same level of exposure.

Leverage comes with increased benefits but significant risks: your investment capital can go further, but you can also lose more than your initial deposit.

Go long or short

Unlike conventional shares trading, CFDs allow you to take a position on the value of an asset whether you think it will go up or down. So if you thought Facebook’s share value was overpriced, you could take a position on it falling. This would not be possible through traditional shares dealing.

The more the market moves in the direction you’ve predicted, the greater your profit. The more the market moves against the direction you’ve predicted, the greater your loss could be.

With CFDs, it’s important to remember that you’re trading on the price of the market, rather than physically owning the share. This means you don’t own any assets.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Spread Betting, CFD Trading and Forex Trading are leveraged products. and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

* Spread Betting and CFD Trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Capital at risk.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk.